Bangkok--27 Aug--Standard & Poor's
NEW YORK Aug. 26, 2009--Standard & Poor's investment-grade and speculative-grade composite spreads tightened yesterday to 244 basis points (bps) and 830 bps, respectively. By rating, the 'AA' and 'BB' spreads expanded marginally by one basis point each to 161 bps and 562 bps, respectively. The 'A' and 'BBB' spreads tightened by the same increment to 207 bps and 317 bps, respectively. The 'B' spread expanded 2 bps to 794 bps, and the 'CCC' spread tightened 2 bps to 1,318 bps.
By industry, spreads tightened slightly across the board, with financial institutions tightening by the largest margin of 3 bps to 450 bps. Banks followed, compressing 2 bps to 366 bps, and industrials, utilities, and telecommunications tightened one basis point each to 424 bps, 233 bps, and 344 bps, respectively.
Despite material tightening since their all-time highs reached in December 2008, the speculative-grade spread remains near some of the highest levels ever recorded in a default cycle, and the investment-grade spread continues to face pressure from financial institutions and banks. In addition, speculative-grade defaults continue to accelerate, as does the preponderance of credit downgrades. Because of these factors, we expect spreads to remain at their elevated levels for some time as investors, the credit markets, and the economy cautiously tread through the current recessionary period.
Media Contact:
David Wargin, New York (1) 212-438-1579, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760
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